DoE Allocates $15.5B to Retool Factories for EV Production - Modern Distribution Management

DoE Allocates $15.5B to Retool Factories for EV Production

The U.S. Department of Energy announced opportunities to help manufacturers retool existing factories and transition to electric vehicles.
DOE Retooling, Source KUKA

On Aug. 31, the U.S. Department of Energy announced a $15.5 billion package of funding and loans as part of the Biden Administration’s Investing in American agenda. The initiative includes: 

  • $2 billion in grants and up to $10 billion in loans to support automotive manufacturing conversion projects that retain jobs in communities that currently host these manufacturing facilities. 
  • $3.5 billion in funding to expand domestic manufacturing of batteries for electric vehicles and the nation’s grid, as well for battery materials and components currently imported from other countries. 

DOE officials said in a news release that the federal investment underscores President Biden’s commitment to retain and expand manufacturing jobs, capture the “economic benefits” of the clean energy transition, and enhance domestic supply chains. 

Domestic Conversion Grant Program

The Inflation Reduction Act of 2022 appropriated $2 billion to provide grants for domestic production of efficient hybrid, plug-in electric hybrid, plug-in electric drive, and hydrogen fuel cell electric vehicles. That section established the domestic manufacturing conversion grant program to provide grants and loan guarantees to clean vehicle manufacturers and suppliers, including component manufacturers.

The grants will give priority to the refurbishment and retooling of manufacturing facilities that have recently ceased operation or will cease operation in the near future. DOE will prioritize entities that will convert, expand, or retool facilities while remaining in the same area as an existing production facility or a facility that has recently ceased operations.

Concept paper submissions are due Oct. 2 at 5 p.m. ET.

Advanced Technology Vehicles Manufacturing Loan Program

DOE is also making up to $10 billion in loan authority available for applications under the Advanced Technology Vehicles Manufacturing Loan Program for automotive manufacturing conversion projects that retain high-quality jobs in communities that currently host manufacturing facilities. 

Through the program, the DOE’s Loan Programs Office supports manufacturing facilities for eligible vehicles or qualifying components, including projects to build new facilities; reequip, modernize, or expand existing facilities; and/or for engineering integration performed in the United States related to the manufacturing of eligible vehicles or components.

Domestic Battery Manufacturing Expansion Projects

MESC published a notice of intent to issue a funding opportunity that represents a second round of funding for battery materials processing and battery manufacturing grants to support the creation of new, retrofitted, and expanded domestic commercial facilities for battery materials, battery components, and cell manufacturing.  

The program will support communities with experienced auto workers and a history of producing vehicles, applicants with strong workforce practices, and applicants who plan to create high-quality jobs, the letter said.

How to Apply

Depending on capital needs, manufacturers can apply to receive assistance via financial grants through DOE’s Office of Manufacturing and Energy Supply Chains (MESC) or preferable debt financing through DOE’s Loan Program Office.

For more information about each opportunity visit the DOE’s Clean Energy Infrastructure Funding Opportunity Exchange page.

Image Source: KUKA

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